Extra money: make it then make it work for you

by Joanna on April 5, 2012

I had some pretty exciting financial accomplishments in the month of March. I paid off my credit card, paid off my smallest student loan to accelerate my debt snowball, and signed up for a business workshop that’s coming to DC next month (and paid in full!). While I paid off the student loan and half of the business workshop with my salary and regular budget, I paid off my credit card solely with money I earned outside my 9-5.

Here are some ways I’ve made extra money this year:

  • tutoring–I’ve been tutoring for the last three years.  I currently have two students that I see on a weekly basis for an hour.  I stack the appointments so they’re one right after the other so it only takes up one week night.
  • house/pet-sitting–Mike and I are house-sitting for the week for one of the families I tutor for.  Not only is this a mini-vacation in a beautiful house, it’s also great opportunity for us to make some extra $$. I also cat-sat for a week in February, visiting the cat during my lunch hour.
  • baby-sitting
  • sold an old text book on Amazon

Here are some other ways to make some extra money:

  •  sell clothes on e-Bay
  • start an etsy shop
  • monetize a skill.  For example, my friend Amanda has great organizing skills (remember when she organized us after the bed bugs?).  I keep telling her that she should start organizing on the side while she finishes up law school.

But simply making extra money isn’t all you have to do to truly make the most of it. I’ve been tutoring for the last three years.  I’m sure I’ve made a couple thousand dollars or more in that time but it wasn’t until recently that I started capitalizing on this side income.

To make your side income really work for you, you have to do two things: capture  and earmark.

Until last fall I would put the cash in my wallet and deposit the checks in my checking account but not really use it for anything in particular.  I’m pretty sure I spent most of that money on food–lunches, coffee, random snacks, breakfast, etc.  What a waste!

But in the fall I set a goal to pay off my credit card. I decided to use my tutoring money to do this.  I earmarked the weekly income from tutoring for my credit card–allocating it before it even came in to one specific goal.

I’d capture this income by knowing the exact total of what I earned and making sure it didn’t get used.  Every Tuesday, I’d walk to the bank and deposit the cash and the check into my checking account. Then I’d get back to my desk and make a payment on my credit card. To capture money for a goal that you have to buy outright (like the registration for the workshop, or a new bag), I still deposit in my checking account and just make sure that I subtract that money mentally when figuring out my balance.

I was amazed at how quickly this income added up when I began to capture  and earmark.

I try not to think about how much progress I could’ve made in the past 3 years if I would’ve done this the whole time.  What’s done is done.  Can only look forward.

I encourage you to try the capture  and earmark method for a few months and see how many goals you reach. Maybe you have some debt you want to pay down or maybe you want to build up a small amount in savings. With spring here and summer on the way, maybe you have weddings coming up, plans to travel to see friends, or have your eye on a cute spring dress. Working this method will make you feel empowered and relieve some of the stress that goes along with big money goals. Go for it! Work it girl!

Let’s chat:

What are some ways you’ve made extra money?

What money goals do you have right now? What would you earmark money for?

I love a good brainstorm–share your ideas for earning and capturing extra money in the comments.

{ 1 comment… read it below or add one }

1 Jacquelyn April 13, 2012 at 11:47 pm

I love your money discussions! I want to look more into the snowballing technique once my crazy selling season dies down and I have time to really look into everything. I always babysit for extra money and for a long time it was my weekly gas money! I’m looking into getting a part-time job or nannying job in the summer when my work-travel slows down. It will give me something to do and some extra money to pay off loans/credit cards. I also plan on using my bonus money to pay off huge portions of student loan debt.

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